Optimism and hope are what keep us all going, but there is much to be said for depression and despair. Hoping for the best is often a sucker’s game – more often than not things are just as bad as they seem, if not worse. Optimism and hope keep us out of the pit of despondency, but that may be where we should be, were we rational. Yeah, there’s always hope – where there’s hope there’s life – but the odds are against it. Those whose mental health, and maybe their sense of identity and worth, depends on the improbable, are taking big chances, and irrational chances, no matter how noble and inspiring. Sometimes things do work out for the best, but don’t bet the farm on it. Expect the worst and you’ll be fine. If the utterly unlikely one good thing happens, you’ll be pleasantly surprised – a bonus. Otherwise, carry on. Delusions of the utterly unlikely may keep you sane, but that’s stretching a definition of sanity quite a bit. Sane people do not build their lives on delusions.

No one wants to hear that. Hope is everything, but academics question that. Lisa Bortolotti, a professor of philosophy at the University of Birmingham, who is the series editor of the Oxford University Press’ International Perspectives in Philosophy and Psychiatry, has long looked into this – see Delusions and Other Irrational Beliefs – and goes even further in an Oxford University Press blog post, Madness, Rationality, and Epistemic Innocence:

There is evidence that people with a diagnosis of schizophrenia, depression, or autism are, in some contexts, more epistemically rational, that is, more responsive to evidence and more likely to form true beliefs, than people without any psychiatric diagnosis. People make more accurate predictions when they are depressed, because the statistically normal way to make predictions is characterized by excessive optimism. People with autism score higher in social interaction games (such as Prisoner’s Dilemma) and are more logically consistent than control participants when making decisions involving possible financial gain, by not responding to emotional contextual cues in the same way as controls. People with schizophrenia are also less vulnerable to a statistically normal but irrational tendency to gamble when faced with a certain loss.

That’s the key observation from a much longer and more detailed argument, that the mad, those who fall outside the norm of common and accepted delusions of unlikely outcomes, are the rational ones here. The mad may be dysfunctional in many ways, but they tend not to make stupid choices. The delusionally sane do that. There are more of them, so that seems normal, but normal in this case isn’t the same thing as rational. We admire those who gamble when faced with a certain loss – they’re spunky or something – but they’re also nuts in their own way. There’s much to be said for giving up when there’s no way to win the game. There are better things to do with your time, or at least more rational things.

People do make more accurate predictions when they are depressed, and President Obama has no doubt been depressed that what he started with that keynote address he gave at the 2004 Democratic National Convention in Boston – all about how there’s no Red America and no Blue America, but only the United States of America, so we can all work together to get at least a few good things done even if we don’t agree on everything – hasn’t worked out. That turned out to be a pleasant delusion. The man on that Shepard Fairey “Hope” poster was delusional, and now that he’d depressed, at least he’s rational:

President Obama’s forthcoming budget request will seek tens of billions of dollars in fresh spending for domestic priorities while abandoning a compromise proposal to tame the national debt in part by trimming Social Security benefits.

With the 2015 budget request, Obama will call for an end to the era of austerity that has dogged much of his presidency and to his efforts to find common ground with Republicans. Instead, the president will focus on pumping new cash into job training, early-childhood education and other programs aimed at bolstering the middle class, providing Democrats with a policy blueprint heading into the midterm elections.

As part of that strategy, Obama will jettison the framework he unveiled last year for a so-called grand bargain that would have raised taxes on the rich and reined in skyrocketing retirement spending. A centerpiece of that framework was a proposal – demanded by GOP leaders – to use a less-generous measure of inflation to calculate Social Security benefits.

The idea infuriated Democrats and never gained much traction with rank-and-file Republicans, who also were unwilling to contemplate tax increases of any kind. On Thursday, administration officials said that the grand-bargain framework remains on the table but that it was time to move on.

He gave up on that “hope” thing, because that was a sucker’s game:

“Over the course of last year, Republicans consistently showed a lack of willingness to negotiate on a deficit-reduction deal, refusing to identify even one unfair tax loophole they would be willing to close,” said a White House official, speaking on the condition of anonymity to describe the budget before its official release. “That is not going to stop the president from promoting new policies that should be part of our public debate.”

He’s just going to be more rational now, and of course the Republicans howled:

“This reaffirms what has become all too apparent: the president has no interest in doing anything, even modest, to address our looming debt crisis,” Brendan Buck, a spokesman for House Speaker John A. Boehner (R-Ohio), said in a statement. “The one and only idea the president has to offer is even more job-destroying tax hikes, and that non-starter won’t do anything to save the entitlement programs that are critical to so many Americans.”

That looming debt crisis would be the other delusion, as the deficit has been cut in half in the last several years, and it’s still dropping, and the polling shows that the public, and even most Republicans, really don’t give a damn:

A Gallup poll last week showed public preoccupation with debt and deficits falling as concern about jobs took over as the top worry for Americans. Healthcare continued to rank among the top problems cited by those surveyed, though it has dropped slightly from its high in November during the botched enrollment rollout of the law.

“Deficits and debt remain salient with the Republican base, but the middle has moved on,” Republican pollster Wes Anderson said.

Republicans scream about the debt crisis, and the public thinks people ought to have jobs, now. Business leaders think people ought to have jobs now – customers are nice, if you’re running a business. Scream about how we need to cut the debt, by stopping all government spending, or scream about the gays getting married, or how only sluts use birth control pills or anything else – people want jobs. As for those job-destroying tax hikes, how does that work? The tax hikes are used for programs that create jobs, and thus create those rather useful people called customers, a process which creates more jobs, to satisfy all those new customers, and so on. What multimillionaire wouldn’t want to chip in a bit more money, to make a hell of a lot more money?

A senior administration official said the budget would also propose new corporate tax rules aimed at preventing companies from moving profits overseas to avoid U.S. taxes. For instance, the rules will seek to limit a company’s ability to borrow domestically – and take large tax deductions on the interest – and then invest the money overseas. Prohibiting corporations from gaming the tax code has been a popular issue among Senate Democrats and would help emphasize bread-and-butter themes in a year when Democrats will also be focusing on raising the minimum wage and other populist measures.

Let the Republicans howl, as the man now without hope will do what makes sense:

Senior administration officials said they decided to chart a more partisan, aspirational path after Republicans failed to respond to the olive branch offered last year. Then, after two years of near-misses on the budget in negotiations with Boehner, Obama still believed a deal was possible. Now, they said, the president is not so optimistic. And he believes it is up to Republicans to make the next move.

And he won’t make it easy for them:

Officials said Obama’s budget request will include other nuggets of note. For example, it assumes that an overhaul of the nation’s immigration laws will pass Congress despite deep divisions in Republican ranks.

Obama knows this budget doesn’t have a ghost of a chance of passing in the House, but if you’re in a game you can’t possibly win, and you have to play anyway, you might as well have a bit of fun, and Jon Terbush dives into the details:

The biggest news is that the budget will propose $56 billion in new spending, while dropping a key compromise that would result in smaller Social Security benefits. The latter idea, known as “chained CPI,” would alter how the government calculates benefits increases for social welfare programs, and it’s generally opposed by liberals. (You can read our more thorough explainer on chained CPI here.)

That might sound like an insignificant bit of wonky gibberish, but it’s actually a sharp reversal. Obama proposed chained CPI in his budget last year, hoping it would convince Republicans to compromise on revenue increases. It was an attempt at striking that mythical “grand bargain” Obama and congressional Republicans have been talking about for years. But Republicans vehemently opposed any new tax revenue, and now Obama is no longer even offering the chained CPI carrot.

Like all clinically depressed folks, Obama simply said screw it:

To be sure, White House budget proposals are largely symbolic documents that outline a president’s ideal budget, not the budget that will actually be passed by Congress. But by yanking a GOP-friendly proposal from the outset, Obama has made clear that negotiating with Republicans is a hopeless cause.

Obama compromised with Republicans often during his first term, and often to liberals’ dismay. As the GOP became more intractable though, that willingness to negotiate waned. House Republicans in particular have thrown a wrench in the president’s agenda, blocking votes on popular bills that already cleared the Senate with bipartisan support.

The divide only widened over the course of last year, with Tea Party-aligned GOPers hijacking the party and pushing it further away from the center. In the resulting chaos, Republicans on multiple occasions couldn’t even agree among themselves about what they wanted to achieve.

So when Republicans demanded a series of dwindling ransoms in last October’s government funding and debt-ceiling fight, Obama stood firm and insisted he would not compromise. And when the debt ceiling came up again this year, the president, backed by congressional Democrats, refused to talk about hostages. Both times, the GOP caved, giving the president even less reason to bow to GOP pressure in the future.

Obama became less vulnerable to a statistically normal but irrational tendency to gamble when faced with a certain loss, so to speak, and Sahil Kapur at Talking Points Memo adds this:

The GOP’s long-held dream of slashing the retirement safety net faded this week.

Back in the summer of 2011, Republicans had it within their grasp. A dejected President Barack Obama placed the crown jewels of liberalism on the chopping block, offering Republicans hundreds of billions of dollars in cuts to Social Security and Medicare benefits.

House Speaker John Boehner wanted to seal the so-called grand bargain, and was willing to reciprocate with the $800 billion in new tax revenues that the president sought in return. Democratic leaders were grudgingly willing to support Obama on what they feared was a lopsided deal for conservatives.

But the Ohio Republican, facing a tea party mutiny that threatened his Speakership, and loyalty issues within his own leadership team, was forced to walk away from the table. By many accounts, he was eager to make it happen, but the pressure from the anti-tax tea party movement was too strong to overcome. And so the deal was dead never to be resurrected.

Nearly three years later, history suggests Boehner was right and the tea party was wrong. Republicans had a once-in-a-generation opportunity to capture their Great White Whale if they had compromised on taxes. … As of this week, Obama has rescinded his offers to chop Medicare and Social Security benefits. The political landscape has changed, and the dream is over.

All delusions end, on both sides here, and Heather Parton (Digby) adds this:

It should be obvious by now that the Republicans will say that whatever the president and the Democrats propose is wrong and are perfectly willing to play both sides of the “entitlement” issue. It confuses the voters, which is a feature not a bug.

Best for Democrats to take this opportunity to move the goalposts and start offering the voters something to hang on to – like the promise of better benefits and more security in these increasingly insecure economic times. Who knows? Doing the right thing might even work.

There’s much to be said for giving up when there no way to win the game. There are better things to do with your time, or at least more rational things, and maybe even the right thing.

Five years have passed since President Obama signed the American Recovery and Reinvestment Act – the “stimulus” – into law. With the passage of time, it has become clear that the act did a vast amount of good. It helped end the economy’s plunge; it created or saved millions of jobs; it left behind an important legacy of public and private investment.

It was also a political disaster. And the consequences of that political disaster – the perception that stimulus failed – have haunted economic policy ever since.

It just that the perception that stimulus failed was a delusion of the first order, as it did do real good:

The case for stimulus was that we were suffering from a huge shortfall in overall spending, and that the hit to the economy from the financial crisis and the bursting of the housing bubble was so severe that the Federal Reserve, which normally fights recessions by cutting short-term interest rates, couldn’t overcome this slump on its own. The idea, then, was to provide a temporary boost both by having the government directly spend more and by using tax cuts and public aid to boost family incomes, inducing more private spending.

Opponents of stimulus argued vociferously that deficit spending would send interest rates skyrocketing, “crowding out” private spending. Proponents responded, however, that crowding out – a real issue when the economy is near full employment – wouldn’t happen in a deeply depressed economy, awash in excess capacity and excess savings. And stimulus supporters were right: far from soaring, interest rates fell to historic lows.

Even that austerity hawk Larry Kudlow apologized on air, saying yep, he was wrong – the stimulus didn’t cause a spike in interest rates, or runaway inflation, or the end of the world, as the markets soared too. That’s the thing about CNBC – the numbers crawl across the screen and pop up in color-blocks all day long – and those are real numbers. Kudlow could no longer keep saying “just wait, just wait…”

He had been wrong, but Krugman points to something else:

Even more important, I’d argue, is the huge natural experiment Europe has provided on the effects of sharp changes in government spending. You see, some but not all members of the euro area, the group of countries sharing Europe’s common currency, were forced into imposing draconian fiscal austerity, that is, negative stimulus. If stimulus opponents had been right about the way the world works, these austerity programs wouldn’t have had severe adverse economic effects, because cuts in government spending would have been offset by rising private spending. In fact, austerity led to nasty, in some cases catastrophic, declines in output and employment. And private spending in countries imposing harsh austerity ended up falling instead of rising, amplifying the direct effects of government cutbacks.

Even PIMCO’s Bill Gross told The Financial Times the depressing rational truth – “The UK and almost all of Europe have erred in terms of believing that austerity, fiscal austerity in the short term, is the way to produce real growth. It is not. You’ve got to spend money.”

Krugman, however, is curious about the persistence of delusion:

All the evidence, then, points to substantial positive short-run effects from the Obama stimulus. And there were surely long-term benefits, too: big investments in everything from green energy to electronic medical records.

So why does everyone – or, to be more accurate, everyone except those who have seriously studied the issue – believe that the stimulus was a failure? Because the U.S. economy continued to perform poorly – not disastrously, but poorly – after the stimulus went into effect.

There’s no mystery about why: America was coping with the legacy of a giant housing bubble. Even now, housing has only partly recovered, while consumers are still held back by the huge debts they ran up during the bubble years. And the stimulus was both too small and too short-lived to overcome that dire legacy.

Even so, there’s no question that the stimulus did work, as best it could:

There’s a long-running debate over whether the Obama administration could have gotten more. The administration compounded the damage with excessively optimistic forecasts, based on the false premise that the economy would quickly bounce back once confidence in the financial system was restored.

But that’s all water under the bridge. The important point is that U.S. fiscal policy went completely in the wrong direction after 2010. With the stimulus perceived as a failure, job creation almost disappeared from inside-the-Beltway discourse, replaced with obsessive concern over budget deficits. Government spending, which had been temporarily boosted both by the Recovery Act and by safety-net programs like food stamps and unemployment benefits, began falling, with public investment hit worst. And this anti-stimulus has destroyed millions of jobs.

It seems that delusions are not only statistically normative – everyone has delusions, and carefully maintains them for their own happiness and sense of worth – they’re also dangerous. They can destroy an economy, and there really is much to be said for depression and despair, and cold sad rationality. Obama gave up on his “Hope” premise – there is a Red America and Blue America and nothing much else at all. It’s best to deal with that, and do what good you can do. Now if the Republicans could abandon their delusions about how austerity is prosperity and how stopping economic activity jumpstarts economic activity… but that doesn’t seem likely at the moment. Note this – Boehner: I’d Rather Kill Myself than Raise the Minimum Wage – and consider just who is acting rationally at the moment.

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About Alan

The editor is a former systems manager for a large California-based HMO, and a former senior systems manager for Northrop, Hughes-Raytheon, Computer Sciences Corporation, Perot Systems and other such organizations. One position was managing the financial and payroll systems for a large hospital chain. And somewhere in there was a two-year stint in Canada running the systems shop at a General Motors locomotive factory - in London, Ontario. That explains Canadian matters scattered through these pages. Otherwise, think large-scale HR, payroll, financial and manufacturing systems. A résumé is available if you wish.
The editor has a graduate degree in Eighteenth-Century British Literature from Duke University where he was a National Woodrow Wilson Fellow, and taught English and music in upstate New York in the seventies, and then in the early eighties moved to California and left teaching.
The editor currently resides in Hollywood California, a block north of the Sunset Strip.

One Response to In Praise of Giving Up

When I was a teen, I was a proud pessimist, and the only one I knew. People would laugh when I told them, “The nice thing about going through life as a pessimist is, you’ll never be disappointed. After all, the worst that can happen is your predictions will be right! And if things turn out better than you thought? All the better!”

But once I got a little older, I realized that this was all just a parlor trick, meant to impress people with how prescient I was. As a philosophy, pragmatically speaking, it was a lot more useless than it seemed, so I grew out of it. Yeah, reality is less fun, but it’s really a better way to live.

I totally disagree with your depiction of Obama’s having given up “Hope” in striking a “Grand Bargain” with Republicans as a product of his having become “depressed”. In fact, even that clip you quoted from Sahil Kapur, talking about back when Obama was playing footsie with the other side, points out that the opposite was true:

“A dejected President Barack Obama placed the crown jewels of liberalism on the chopping block, offering Republicans hundreds of billions of dollars in cuts to Social Security and Medicare benefits.”.

In other words, there was a time when Obama was so dejected, he wouldn’t stand up and fight, while what’s happening now is happening because he’s snapped out of it! He hasn’t given up Hope, he’s regained it! It seems he’s decided he should try to do the right thing, whether or not he can persuade Republicans to join him.

Of course, there’s a danger that, in trying to pass a budget that has no chance of passing, Obama will just be doing what House Republicans were doing in passing over 40 bills to repeal Obamacare. But for some reason, there seems to be a difference if he seriously tries to make his case and doesn’t approach it as just another lost cause.

But there’s another little point I disagree with you on:

“That looming debt crisis would be the other delusion, as the deficit has been cut in half in the last several years, and it’s still dropping…”

While I absolutely agree with you that the “debt crisis” is a Republican delusion, I still think you, like those silly Republicans always do, seem to be equating the “debt” with the “deficit”.

After all, we could, theoretically, have one without the other. When we spend more than we have coming in, which we sometimes have to do, we have two possible ways to finance this:

(a) We can increase taxes to pay for it, or (b) We can borrow to pay for it, and pay the debt back later.

(Why choose (b) instead of (a)? Because increasing taxes during bad times — when folks haven’t enough money to spend, so why would they have enough money to pay more taxes? — could just make things worse, so we put off doing that until good times return. In fact, while our budget deficit is presently falling, I think our debt is still growing, which tends to happen during economic downturns because of the safety net automatically kicking in.)

Anyway, the main point is — and I gather you and I do agree on this — that just because our debt has increased does not mean there’s a “crisis”. After all, the highest debt-to-GDP level this country ever saw was during WWII, yet there was little panic over it at the time, and only a few saw it as a “crisis”. In fact, it led to a postwar economic boom! And it’s worth noting that today’s debt level is nowhere near that of the 1940s.

The only thing I don’t like about Obama’s new approach is he has apparently decided to leave that stupid “Grand Bargain” thing on the table, ready for a revisit if Republicans ever agree to stop being obstructionists — as if anybody with a brain shouldn’t have already figured out that there’s no reason to worry about balancing the budget anymore, since fixing our ailing economy should, in good time, automatically take care of that.

This is not to say that Obama doesn’t have a brain. Although he is still too ready to “hand the car keys over to the Republicans” (something my neighbor, back in early 2008, used to accuse Hillary Clinton of being), he is still, in my opinion, the best person around — certainly the smartest person — for the job.

With the possible exception of Paul Krugman, of course. Come to think of it, what a thought! Many of us who went for Barack Obama back then did so because he seemed to be the smartest person in the room, and today, it’s Paul Krugman who has been shown to be right about everything!

So now that we’ve had a black president, is America ready for its first Jewish president?

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